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BIZCHINA / Weekly Roundup

On the ball
(China Daily)
Updated: 2006-03-29 09:54

Here's some recent news you might have missed: South Korea officially overtook Japan to become China's third-largest source of overseas investment in the first two months of this year.

The country is only behind Hong Kong and the British Virgin Islands, the Ministry of Commerce announced on March 13.

Another recent news report could well explain why South Korean companies are increasingly interested in pumping money into the country. Samsung China announced earlier this month that last year's sales hit US$25.3 billion, beating its target of US$25 billion. In 2004, the figure jumped to US$24 billion from US$16 billion the previous year.

Over the past 14 years, South Korean companies have been so successful in China that many including Samsung, LG and Hyundai have become inspirations for Chinese enterprises.

Riding the wave

Shin Bong-kil, Minister of the Embassy of the Republic of Korea to China, believes many South Korean firms have simply excelled at keeping up with economic and industrial trends and grasping opportunities in the Chinese market.

He says that South Korean companies have tackled overseas markets in two stages. Companies such as Hyundai and Daewoo broke into the Middle Eastern market in the 1960s, providing them with profits to further develop business in other countries. The other wave of overseas development was focused on the Chinese market since 1992, when the two countries established diplomatic relations.

Geographic proximity, a history of exchanges dating back more than 1,000 years and shared Confucian values have made China an ideal investment destination.

South Korean giants Samsung and LG are both planning operations in China on the same scale as at home. LG, for example, has even constructed a twin-tower building in one of Beijing's top business districts, similar to its twin-tower headquarters in Seoul.

Gregory Lee, chief marketing officer of Samsung Electronics, tells China Business Weekly that the company is already the second-largest foreign investor in the country, with US$4.5 billion.

Heavy investments in China are only part of the South Korean success story, however. Their understanding and anticipation of industry trends has also been a big factor. When Samsung Electronics and LG Electronics entered the market around 1992, many Chinese families were making the transition from black and white to colour TV sets.
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(For more biz stories, please visit Industry Updates)

 
 

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